drive that traffic from the railroads and on to trucks by the imposition of unreasonable and excessive charges. I should also like to answer charges made by Mr. Alpert, Mr. Rice, Mr. Perlman, and others that the Post Office Department has made "threats of massive traffic diversion" to other modes of transportation and by such "pressure" has "browbeaten" them into transporting mail at rates less than those established by the Interstate Commerce Commission. I will pass without comment the fact that many of these same witnesses have recommended changes in the law which would grant them the same right to reduce freight rates in order to meet competition that they now enjoy in the case of mail. I want to state categorically that the statements that the Post Office Department has forced reductions in rates by threats, pressure or browbeating are absolutely untrue. The fact is that the Department has taken every conceivable means of cooperating with the railroads in order to permit them to continue to transport mail. When their rates have become excessively disproportionate to competing truck rates on any route, the Department does not merely remove the mail and transfer it to trucks: the Department informs the railroad of the probable truck cost and offers the railroad the opportunity to retain the mail by meeting the competitive cost. If the railroad elects to do so, it retains the traffic. This preference which has traditionally been accorded the railroads cannot fairly be termed a "threat." Mr. Alpert accused the Post Office Department of "threats of massive truck diversions," and his railroad, the New Haven, is one which transports mail at less than Interstate Commerce Commission rates, pursuant to a systemwide agreement between the Department and the railroad effective January 1, 1955. However, the truth is that the New Haven found that it was peculiarly subject to truck competition and its representatives came to the Department and requested a contract whereby the railroad would retain the mail but at a competitive rate. The contract was not forced on the railroad; it was entered into at the railroad's suggestion and request and for the railroad's benefit. Several witnesses, such as President Murphy, of the Burlington Lines, have suggested that the Post Office Department could be helpful if it would restore more mail to the railroads. One of the chief causes of the reduction in mail on railroads in reecnt years has been the abandonment of lines by the roads. Thirty years ago there were more than 10,000 usable passenger trains available for the transportation of mail. Today there are fewer than 3,000. President Symes, of the Pennsylvania, filed an exhibit with this committee showing that the annual passenger train-miles on the Pennsylvania have declined from 59 million in 1929 to less than 29 million in 1956. As a result of this deterioration in railroad service, railroads are today serving less than one-third of the 37,409 post offices in the country. The Department has long since been required to make alternative arrangements for the transportation of mail to and from the remainder by another segment of the transportation industry. Suggestions that mail be restored to the railroads lack merit as long as the trains which formerly carried them are no longer in existence and the branch lines on which they traveled have been abandoned. The foregoing is intended as a reply only to a few of the more misleading, incorrect statements which have been made by railroad officials. The Department will look forward to an early opportunity to make a complete statement of the railway mail situation. The correct facts will, I believe, be of great interest to you and your committee. Sincerely yours, ARTHUR E. SUMMERFIELD, WARD TRUCKING CORP., Altoona, Pa., December 24, 1957. Hon. JAMES E. VAN ZANDT, Member of Congress New House Office Building, Washington, D. C. DEAR JIMMY: The common carriers operating over the highways, have deep interest in the hearings which the Surface Subcommitee of the Senate Interstate and Foreign Commerce Committee has scheduled for January 13, 1958: First of all, we have deep sympathy for the railroads in their concern over their present condition. All of us recognize the great job done in the past and being done today by the railroads; we think they will continue to do a good transportation job. We recognize that many of the less fortunate ones are confronted with financial handicaps. For example, the 3-percent transportation tax and the 10-percent passenger-fare tax discriminate against all regulated carriers. Congress has deemed it desirable to exempt from Federal regulation truck movements of farm products and the courts have by interpretation, greatly expanded the list of exempt commodities. Then, there is the abuse growing out of section 22 of the Interstate Commerce Act, under which Federal, State, county, and municipal governments demand and receive freight rates so low in many instances that they do not recapture even the simple out-of-pocket costs of the services. Then too, the unreasonable requirements of many State authorities in requiring railroads to operate passenger service at less than cost, and to operate both freight and passenger services on branch lines at revenue substantially less than the cost. All of these interests we think should be considered by the Senate. I hasten to add that all of the items mentioned above except the passenger deficit and the branch-line operations, adversely affect all common carriers, regardless of whether they are railroad, motor carriers or water carriers. We hope that the Senator committee, if it concludes that some legislation is necessary, will keep in mind the needs and requirements of the highway common carriers. It is our desire to be of assistance to the Senate in their efforts to help the railroads, but, naturally, we urge with all the force we have that any corrective measures should not be detrimental or destructive to other established modes of transportation. There have been many recent newspaper and magazine articles setting forth railroad demands that they be permitted to buy and operate motor truck services separate and distinct and in addition to their established railroad services. The highway industry is unalterably opposed to the control and dominance of transportation by any single mode. We believe that each mode of transportation should be encouraged to develop to its utmost in its own field and to develop technological experiences in its own area. We have in this country today the greatest transportation plant in the world, and one reason for this was the ability of each mode to develop its own procedures. We firmly believe that if it had been left to a single mode of transportation, say to the railroad industry, to develop modern methods of transportation on highways, on waterways and in the air, that our transportation plant would never have developed to the point we have today. To expect a single dominant mode to advance the interests of competing modes would be like expecting a shoe cobbler to urge his customers to go about barefooted. The motor common carriers have long advocated coordination of services with and between all common carriers. They have repeatedly stated not only their willingness but their desire to join in through routes and rates with other modes of common carriage transportation. In fact, whenever our rail friends have evinced a willingness to enter into joint rates with highway common carriers they have done so. A typical example of this is the motor common carrier's practice of shipping their own trailers over the Pennsylvania Railroad. Each month they turn over to numerous railroads thousands of highway trailers for movement on rail flat cars. This is an evergrowing source of new revenue to the rails. I know of no instance in which the rails have expressed willingness to enter into joint rates and through routes where the motor common carrier has failed to join with them. The advantages accruing to the rails in a completely coordinated scheme of joint routes and rates might well exceed the advantages they might gain by spreading over onto the highways. The motor common carrier will welcome an opportunity to present our industry views-pro and con at whatever time the subcommittee suggests. We think the proceedings should embrace the entire transportation industry rather than a single component part. I know of your very busy schedule but I am hopeful that you can get time to read the enclosed. Note the date on Board Docket No. 104-March 28, 1946. The rail problems are nothing new-they are the same problems of all common car riers i. e. contract carriage section 22 rates-exempt commodities-excise taxes on regulated transportation. Sincerely, JACKSONVILLE, FLA., February 13, 1958. Hon. GEORGE A. SMATHERS, Chairman, Surface Transportation Subcommittee, United States Senate, Washington, D. C. DEAR SENATOR SMATHERS: As of November 12, 1957, the Pullman Co. completed 6 years (1952-57) without a passenger fatality. During that period, more than 72 million passengers traveled in pullman cars in journeys totaling more than 44 billion passenger-miles or a distance equal to more than 1,700,000 trips around the world without a fatal accident, and for this reason "The steel wheel on the steel rail is still the most comfortable and the safest form of transportation." The Pullman Co. does not carry passengers. That function is handled by the various railroads it serves under the terms agreed to by the United States district court in the antitrust case on May 8, 1944. The words "safety" and "service" are the keys which unlock the understanding of the company's functions and its relationship to its employees, the traveling public, and the contracting railroads. The service is personal; it is added luxury offered by our company, and once accepted and paid for by the traveler, may be expected to develop in as many directions as human ingenuity and personality may devise. Pullman employees are rightfully expected to deliver the service which their employer has sold, and safety is a matter of first concern to the Pullman Co.'s management and all its employees. In summary may I say that safety and service to its patrons as described herein amply demonstrate the need for a Pullman Co. owned by the railroads it serves, to continue to operate and to be of service to the traveling public in the United States. It is my desire that this statement be included in the printed record of the hearings you are now conducting as chairman of Surface Transportation Subcommittee. Sincerely yours, MARTIN A. DRISCOLL, Jacksonville Pullman Conductor. Senator SMATHERS. I desire to make a further brief statement at this particular moment. As this phase of the hearings on the condition of the railroad comes to a close, I wish, on behalf of the Surface Transportation Subcommittee to make this brief statement. First, I want to compliment the witnesses who have appeared during this week. It has been a most profitable experience to listen to the testimony of the men who have appeared. Their high caliber, their ability and their sincerity is inspiring to those of us who have heard them. It is obvious that they know what they are talking about, and they possess the rare ability to express themselves with coherence, precision and persuasiveness. I only wish all the Members of the Senate could have heard them. Our country, its economy, its population, are all moving forward. Changes are inevitable, and are, in fact, occurring at an astonishing pace. Transportation, one of the primary factors of our growth and our change, it itself undergoing great change. The testimony thus far clearly demonstrates that the railroads, once the dominant, overpowering segment of our Nation's transportation, no longer occupy that position. They have lost their preeminence, some of their importance and most, if not all, of their profits. They are no longer an awesome monopoly, but they are still essential to this Nation's economy in peace as well as in war. For that reason, we, as responsible legislators, cannot permit the railroads to die. Attention by the Congress looking toward relief of at least some of the pressures and restrictions of the railroads is imperative. That is the basis for holding these hearings. I am sure that all of us on this committee fully appreciate that the clock of time cannot and will not be turned back, and I, for one, highly recommend that railroad officials avoid such an illusory hope. To accomplish any relief through legislative action will, however, require more than just hearings and studies, more than just pages of detailed testimony. I concur with the chairman of the Florida Railroad Commission in his statement that a new attitude is essential if we are to solve this problem of the railroads. This is necessary, for more-much more— than just the railroads is involved. Our Nation's economy, our Nation's welfare and future, is and must be our final consideration. The railroad industry is the second largest industry in the United States and the fourth largest employer in the country. It has been in the past one of the largest purchasers of steel, oil, lumber, and many other items, as you have just heard Mr. Williams detail. Obviously, when the railroads' economic position begins to deteriorate and they start a drastic retrenchment program, it has far-reaching effects throughout our entire economy. These hearings have already revealed that railroad employment has dropped from 1,226,663 in 1952 to 985,100 in 1957, a decrease of 241,563 employees for the 5-year period, or an average reduction of over 4,000 per month. Not only has this resulted in a tremendous economic loss to labor, but it has been an equally tremendous drain on unemployment and pension funds set up to take care of the unemployed. In 1951, the railroads purchased 6,558,000 tons of steel. This was close to 10 percent of the entire United States consumption of steel. Since that time, there has been a constant but steady decline in the purchase of steel by the railroads, and no one needs to remind any of us of the importance of steel to our economy. In the light of these figures, and the obvious connection drawn from them, it is important that all of us, in and out of the transportation field-even those in the transportation field, but not in the railroad industry-must raise our sights and develop a new attitude, a spirit of objectivity and selflessness, if we are to stop the destruction of a vital part of the transportation system and the downward trend of our Nation's economy. The testimony, thus far, eloquently demonstrates that the need is great, the cry is urgent, and the time for constructive action is now. In his connection, I would like to congratulate the press that has thus far, so well covered these hearings. It has, in my judgment, placed this problem effectively and accurately before the people. It has demonstrated that it recognizes this to be a national problem, PROBLEMS OF THE RAILROADS affecting all our people, irrespective of whether or not they are actively engaged in the transportation field. And in a representative government such as ours it is important that the people of the Nation be aware of the Nation's great problems. When such is the case, we usually find their representatives in the Congress anxious to meet and solve those needs. In this particular field the press has been and will be of inestimable benefit to the Nation. It is planned that the next phase of these hearings will be held in the month of February, at which time the subcommittee will invite the Postmaster General, the Secretary of Commerce or his representative, the Interstate Commerce Commission, a spokesman for the Department of Defense, representatives of railway labor, and others to offer testimony. Again, I wish to thank the witnesses who have appeared. We now stand in recess until further notice. (Thereupon, at 3 p. m., the subcommittee was adjourned, to reconvene upon notice.) |